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Sunday, 5 February 2017

Moving Markets - Mnuchin Style

Fund Portfolio Management - FPM have speculated on Treasury Secretary nominee, as at time of
writing, Steven Mnuchin's motives circumstances and ethics, among
other considerations, for assigning an insider-trading reputation, under the “NoSmokeWithoutFire:Of Reputation”
investigative enterprise.Backgound To FPM's NSWF:ReputationFPM's new millennium financial technology "fintech" enterprise seeks to arbitrate governance in the space of illegal insider trading, initially in the financial investment
management sector. In the 21st Century, an age old
white-collar corruption of capital markets for the benefit of the few and to the detriment of the many, CAN AND SHOULD BE ERADICATED. Insider trading with "non-public material information", creates an un-level
playing field for the majority of stockholders in listed companies or corporations. Through exclusivity of procuring share-price moving information, a bias and distortion affects stock market buyers and sellers. Such "exclusivity" and extended to broader circumstances has contributed to social wealth inequalities in the history of money-lending.

FPM's
bold and honed challenge is
to intervene in application of Rule 10b-5 of the US Securities Exchange
Act of 1934 about illegal insider trading. The equivalent laws inherent in other
global financial capital markets is also of great concern. The service
FPM provide is especially for those
institutional shareholders and indirect vested parties, that are
perhaps unwittingly disadvantaged materially through insider trading.
The privileged few
insiders exchanging non-public material information about a
stock-holding in their trading portfolio will by magnitudes make
profit at the expense of majority of investors. Otherwise if everyone
had had access to the same information at the same time everyone
affected similarly. Most economic student are falsely taught from the
beginning that this is the prevalent state through "Efficient Market
Hypothesis" (EMH). While economic finance and investment students, and
professionals alike are inducted to believe in efficient capital markets
with "perfect" knowledge i.e. level playing field, for all
participants; on closer inspection a merely illusory proposition termed
"hypothesis" . That is it is merely theoretical of the expected and
legal reality; whereas the "sharp practices" exist in reality.

The illicit insider trading parties benefit from the market
participants as a whole reacting to an eventual public announcement,
which moves the asset-price in question in a certain big-swing direction. The
illicit traders were already positioned with their stock-holding to
realise profit from the eventual and actual market announcement.

Exclusive Insider Trading: An ExampleSay one is a pension investor holding Google stock (GOOG) in a portfolio, and was not privileged to have prior information, i.e. ahead of a share-price moving announcement by the company representatives. While another hedge fund investor who was privy to the leaked-information of this announcement, through law-breaking means, can anticipate the degree of significant share-price swing and accordingly adjust his holding of Google to make a confident no-risk trading profit, for his portfolio investors. Whereas the former fair-trading pension investor may not have foresight or opportunity to reduce or increase his Google stock-holding, or otherwise sufficiently adjusted his portfolio, to benefit from the subsequent announcement and share price swing. FPM strongly believe that without a level playing field in the investment management industry for long-term savers, there exists a two-tier system of returns; the superior savers' return system is the one through which stealing of inside information information is the edge.Mnuchin Case MinutiaeSpecifically pertaining to an investigation action, Mr Mnuchin moved
the markets as recently as 29th November 2016, when share prices of
“Fannie Mae” and “Freddie Mac” spiked up some 30%. The speculative
question is whether his material public announcement or speech was
also made earlier and privately to a few investors? If Mr Mnuchin
gave his former investment trading colleagues, at ESL for example, an
information edge prior to public speaking, then this can potentially
compromise his integrity. FPM say “potentially” because of the
technical burden of legally proving malfeasance is onerous
presently. “Fannie” and “Freddie” are investor's cant for
stock market listed Government Sponsored Enterprises (GSEs), a quasi
Government and private-sector entity backing American house mortgage
loans.

The share-price spike as depicted in above diagram was based on
traders and analysts speculation. Betting that Mr Mnuchin,
supporting his nomination for Treasury, had suggested that the
housing focused and taxpayer-backed GSEs, struggling since the
financial crisis of 2007-08, might be restructured and “privatized”. What he had said, which created the sharp uplift in “Fannie"
and “Freddie” share prices in November, is shown below:

"We got to get Fannie and Freddie out of Government
ownerships, it makes no sense that [the two federal mortgage
agencies] are owned by the government and have been controlled by the
government for as long as they have." Speaking to Fox
Business Network’s Maria Bartiromo on 29-Nov-2016.

This surge in related shares price settled down, and on 19th
January 2017, at the Financial Committee confirmation hearing for Mr
Mnuchin's candiditure for Treasury chief, he clarified his comments
about the two quasi public-private mortgage agencies:"My comments were never that there should be recap and
release."

Shares of Fannie and Freddie
sold-off around 11% in the minutes after Mnuchin made his comments -
both recovered a bit by close. FPM wonders if that was interpreted by investors as political
double-speak denial for exactly the opposite which the Treasury under
Mnuchin is expected to do under its top 10 priority? Since that
Finance Committe confirmation hearing rebuttal of “recap and
release”, the two GSEs have surprisingly resumed an uptrend in
share-price.

Under the heading of “Where
The Wind Blows”, FPM's
adduced assessment of which organisations and individuals are
involved in insider trading, is speculatively
framed. In
Mnuchin's case, using
internet and its
subscription resources such
as Muckety interactive
relationship mapping, we know straightaway that GoldmanSachs, Edward Lampert's ESL
Investments, and alumni of his failed hedge fund, Dune Capital could
potentially be tipped-off, ahead of share-price moving public
statements. Further
opportunity for insider-trading would be afforded by the
public-relations lobby group connected to very inflential people,
corporations and sovereign-state clients, Patton Boggs, LLP.

Our
presumptive spotlight for financial market malfeasance falls on
William Ackman of hedge fund Pershing Square Capital Management.
Fannie and Freddie are large positions of Mr Ackman’s Pershing
Square, who suspiciously converted to a Trump fan right after the
election! On the 10-Nov-16, 2 days after the election of Donald Trump as
President of the USA, Mr Ackman made this statement at a press
conference organised by New York Time:

"I
think Fannie and Freddie are going to get resolved in the first 12
months of this new administration, and I'm looking forward to having
my second meeting with Donald Trump and negotiating a deal...”
William Ackman
of Pershing Square Capital
on days after Trump election.

Another set of illuminaries and cabal hunting as pack-of-wolves are
highlighted in “Moving Markets Mnuchin Style”. They are hedge
funds who have openly welcomed privatising the now profitable public
entity which as public-private concerns the two GSEs cost the taxpayer $188 bn to
rescue at the height of the financial crisis, despite reports that
taxpayer bailout have being repaid in 2013/14. These billionaire
financiers attacking in pack like wolves, tended to have power under politics-for-sale and policies-for-donations operandi of recent successive USA adminstrations. We will keep tabs on "Tumpet-Trump" to see if he will take on wolves that include Bruce Berkowitz (Fairholme Capital), Richard Perry and Mnuchin’s pal and
ex-partner, John Paulson. Add to this list Carl Icahn, "a longtime business Trump Friend and business partner, has invested $50 mn in Fannie and Freddie"

Further stage of FPM insider-trading ratings research, would come
under template heading “Spreading Like Wildfire”. This
would be related to Mnuchin's reputation from previous mentioned "where
the smoke blows" identification of his past and present working and
personal
relationships. Spotting Mnuchin's relationships with motive and
opportunity in
their profile (indicated e.g. by past loose practice codes in relation
to ethics, greed, morality and humanity), starkly points to
another close associate of
Mnuchin, Edward Scott Lampert, of the mentioned eponymous hedge fund
ESL Investments.

In short ESL is the largest shareholder of the
famous Sears Department retails stores which had merged with equally historical
“K-Mart” stores under difficult times. However, the storied Sears now synonymous in reputation as Edward “Sears” Lampert, since he is its decade-long chief executive and
chairman. At least one commentator has
questioned Mr Lampert's role as Sear's hedge-fund stockholder and the store's chief
executive Chairman (“His dual roles give him inside information
that motivates his actions.”). See the 2-years stock price chart
below, compared with benchmarks “retail – consumer discretionary”
and “retail – consumer staples” to see the declining and unarrested fall of this retail giant of America:

The Long Slow Ruination of Sears Holding Under ESL Investments

FPM's greater critical
rating, as
opposed to corporate
“mainstream media muppets” dubbing
as the next “the next Warren Buffett” is
not based on agenda; which
we at FPM
know in hedge-fund terms of shorting, leverage, CDS and other means
of disaster-capitalism that
our review
degree reputation for Mr
Lampert is Eddie “Sears-Stealing” Lampoon”. This
NSWF:Reputation degree has double-edged meaning too; especially when
we balance a Zerohedge narrative “Sears Kept Alive by itsCEO, Eddie Lampert, Again” on
29-Dec-16.

In relation to Mnuchin's interview and market moving comment about
housing-backers Fredie and Fannie, we know Mr Lampert is reputedly
asset-stripping Sears department and former Kmart stores for its
real-estate value. So this bad-boys link, as well as Mnuchin's
connection as Director of Sears Holding Corporation, places them at
the scene of the crime shown in the ruination price chart of Sears
above.

Inexorably, for exploring the investigative focus, we also note than
another of President Trump's nomination, for health secretary Tom
Price, had a confirmation hearing discussing links to
insider-trading. FPM won't elaborate on this “wildfire” of
insider-trading but point to research by staff at “Crooks and Liars” - a website service. To access that by them story click on
the link provided.